NEW YORK The dollar strengthened and global equity markets rebounded on Thursday after data showed the U.S. economy grew strongly in the last quarter of 2013, a rate that suggests solid corporate earnings and continued solid growth into the new year.

"There was a general rebound in risk sentiment," said Jeffrey Young, U.S. interest rate strategist at Nomura Securities International in New York. "Some confidence grew back with the emerging markets story no longer developing."

The ruble hit record lows against the euro early in the session, while the rand slid to multi-year troughs before rebounding. Moves earlier in the week by Turkey, South Africa and India to staunch capital flight had failed.

Emerging market currencies have felt the heat since the U.S. Federal Reserve said it would begin to trim its stimulus, a program that has injected more than $3 trillion into the U.S. economy and world markets since the onset of the financial crisis.

The U.S. Commerce Department reported that gross domestic product grew at a 3.2 percent annual rate in the fourth quarter, which combined with the 4.1 percent pace in the third quarter resulted in the biggest half-year increase since 2003.

The GDP growth, which was in line with economists' expectations, drove a turnaround in equity markets in Europe and a broad rise in Wall Street stocks. The S&P 500 scored its biggest gain in more than a month, and the Nasdaq composite index gained more than 2 percent at one point, helped by strong quarterly revenue growth at Facebook Inc (FB.O).

Facebook shares rose 14.1 percent to finish at a record closing high of $61.08.

The dollar was up 0.7 percent .DXY against a basket of six major currencies, at 81.069, and the appeal of the greenback revived against the safe-haven yen and Swiss franc.

"There's a lot of concern over what's happening overseas but in the domestic (U.S.) market GDP was pretty strong," said Cam Albright, director of asset allocation at Wilmington Trust Investment Advisors in Wilmington, Delaware. "If you see growth in the economy pointing to higher earnings growth, that will give markets more confidence in the United States."

The Fed, as expected, said on Wednesday it will cut its monthly bond purchases by another $10 billion in February, to $65 billion, as policymakers see less need for stimulus.

"The end of QE is an indication the economy is getting better, though I'm not sure the market has entirely transitioned to that idea yet," Albright said.

The euro fell 0.81 percent against the dollar at $1.3552, while against the yen the greenback was up 0.38 percent at 102.67 yen.

In Europe the pan-regional FTSEurofirst 300 index .FTEU3 of leading companies closed up 0.3 percent at 1,294.26.

Gold fell more than 2 percent, on track for its biggest one-day drop in more than a month, as the U.S. GDP data and the Fed's decision to keep trimming its stimulus boosted the dollar and led traders to cash in gains in the metal.

U.S. COMEX gold futures for February delivery settled down $20 an ounce at $1,242.20.

Brent oil rose to just over $108 per barrel, and U.S. crude reached its highest level in a month on bitter cold weather in the United States, which has boosted heating oil demand.

Brent crude rose 10 cents to settle at $107.95 a barrel. U.S. crude settled up 87 cents at $98.23.

The U.S. bond market retreated following Wednesday's rally, but some of the money leaving equities found its way into the developed world's government bond market.

German Bund futures rose 33 ticks to settle at 143.23, while German 10-year yields fell to their lowest level in nearly six months before ending at 1.712 percent.

Benchmark 10-year Treasury notes were last down 5/32 in price to yield 2.6949 percent.

(Reporting by Herbert Lash; Additional reporting by Toni Vorobyova in London and Rodrigo Campos in New York; Editing by Dan Grebler and Leslie Adler)

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